) Some companies use process costing and some use job-order costing. Which metho
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Question
) Some companies use process costing and some use job-order costing. Which method a company uses depends on its industry. A number of companies in different industries are listed below:
i. Specialty coffee roaster (roasts small batches of specialty coffee beans)
ii. Custom aircraft builder
iii. Brick manufacturer
iv. Microbrewery that produces a number of different beers
v. Steel company making chain link fences from iron ore
Required:
For each company, indicate whether the company is most likely to use job-order costing or process costing
Explanation / Answer
1)Specialty coffee roaster uses process costing 2)Custom aircraft builder uses job order costing 3)Brick manufacturer uses process costing 4) Microbrewery that produces a number of different beers uses job order costing 5) Steel company making chain link fences from iron ore uses job order costing
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